Thursday, March 15, 2012

Importers only need to fill central excise form: NRB

The central bank has asked the importers to fill a separate form 'ARE 1' instead of the forms that were is use currently.After the Duty Refund Procedure (DRP) has been scrapped under the revised Indo-Nepal Trade Treaty, the importers now need not fill 'Nepal Invoice' or 'Invoice of goods liable to central excise duty in India transmitted under excise seal to Nepal' that was one of the most important documents while opening Letter of Credit (LC) for imports in foreign currency, according to the central bank that has asked the 'class A' commercial banks and 'class B' development banks to follow the directive while opening the LC in foreign currency payment for importers from India.The importers, since March 1, do not need to fill the 'Bill of exports for duty free goods' form along with LC, as the Duty Refund Procedure has been scrapped. Earlier Indian Central excise used to refund the duty to the government and the forms were used to calculate the duty to be refunded.Earlier, purchases from India were normally paid for in Indian Currency since the currency is fully convertible in Nepal. When Indian suppliers sell their products to Nepali importers, they used to pay Indian excise duty and used to be refunded.Both Nepali and Indian governments had agreed to implement the Duty Refund Procedure according to the revised Nepal-India Trade Treaty signed in 2009. Nepal also allows imports of specified products from India with payment in foreign currency. The Nepal Rastra Bank has listed the products imported from India against the payment in foreign currency. Of the total imports from India, around 60 per cent of the goods are imported in foreign currency instead of Indian Currency, according to the Finance Ministry.Nepal has got rid of the time-consuming process of duty refund which the Indian government used to charge and refund, but it also is feared to encourage under invoicing by the importers, according to the ministry.India is the largest trading partner of Nepal.Exports to India went up by 13.9 per cent during the six months of the current fiscal year compared to an increase of 9.3 per cent in the same period of the last fiscal year. Similarly, imports from India increased by 10.1 per cent compared to a growth of 28.2 per cent in the same period of the last fiscal year.